GeoPark's Q4 2024: Contradictions Uncovered on DUPLICAR Capacity, Argentina Acquisition, and CapEx Strategy
Thursday, Mar 6, 2025 11:40 am ET
1min read These are the key contradictions discussed in GeoPark Limited's latest 2024Q4 earnings call, specifically including: DUPLICAR project capacity, Argentina acquisition timeline and regulatory processes, and CapEx allocation strategy:
Production Performance in Vaca Muerta:
- GeoPark's unconventional hydrocarbon blocks in Vaca Muerta delivered an average production of over 15,000 barrels a day gross in the fourth quarter of 2024, which is 19% higher than the third quarter of 2024 and almost 50% higher than when the transaction was announced.
- The increase in production is attributed to the quality of the assets and the impressive operating skills of the partner, Phoenix.
Reserves and Reserve Life Index:
- Pro forma 2P reserves reached nearly over 160 million barrels, driven by the addition of 74.6 million barrels from the Vaca Muerta assets, a 41% year-on-year increase.
- This growth extended the reserve life index to 13 years on a 2P basis and the 1P reserves to 8.2 years, reinforcing the company's long-term value creation.
Financial Performance and Cash Generation:
- Full year 2024 adjusted EBITDA was $416 million, representing an 8% decrease compared to 2023, following lower production and one-off financial expenses.
- Despite operational challenges and a lower oil price environment, the company was able to sustain its cash generation capacity and maintain a strong capital efficiency ratio of 2.2 times adjusted EBITDA.
Shareholder Returns and Financial Health:
- GeoPark rewarded shareholders with almost $74 million through dividends and buybacks in 2024, representing a record annual shareholder cash return of around 14% yield.
- The company's net leverage remains well below the target of under 1.5 times adjusted EBITDA, with no significant debt commitments until 2030, enhancing financial flexibility.
Sustainability and Environmental Responsibility:
- GeoPark has been recognized for its commitment to sustainability, being included in the S&P Sustainability Yearbook for the first time and maintaining its AA rating in the MSCI Index.
- The company's dedication to operating responsibly and creating value for all stakeholders is highlighted by these achievements.
Production Performance in Vaca Muerta:
- GeoPark's unconventional hydrocarbon blocks in Vaca Muerta delivered an average production of over 15,000 barrels a day gross in the fourth quarter of 2024, which is 19% higher than the third quarter of 2024 and almost 50% higher than when the transaction was announced.
- The increase in production is attributed to the quality of the assets and the impressive operating skills of the partner, Phoenix.
Reserves and Reserve Life Index:
- Pro forma 2P reserves reached nearly over 160 million barrels, driven by the addition of 74.6 million barrels from the Vaca Muerta assets, a 41% year-on-year increase.
- This growth extended the reserve life index to 13 years on a 2P basis and the 1P reserves to 8.2 years, reinforcing the company's long-term value creation.
Financial Performance and Cash Generation:
- Full year 2024 adjusted EBITDA was $416 million, representing an 8% decrease compared to 2023, following lower production and one-off financial expenses.
- Despite operational challenges and a lower oil price environment, the company was able to sustain its cash generation capacity and maintain a strong capital efficiency ratio of 2.2 times adjusted EBITDA.
Shareholder Returns and Financial Health:
- GeoPark rewarded shareholders with almost $74 million through dividends and buybacks in 2024, representing a record annual shareholder cash return of around 14% yield.
- The company's net leverage remains well below the target of under 1.5 times adjusted EBITDA, with no significant debt commitments until 2030, enhancing financial flexibility.
Sustainability and Environmental Responsibility:
- GeoPark has been recognized for its commitment to sustainability, being included in the S&P Sustainability Yearbook for the first time and maintaining its AA rating in the MSCI Index.
- The company's dedication to operating responsibly and creating value for all stakeholders is highlighted by these achievements.
